One of the economic indicators that I follow as a harbinger of the health of the Chicago real estate market is Chicago area employment. The Bureau of Labor Statistics provides that data for the greater Chicago metropolitan statistical area which includes all the suburbs from Naperville to Elgin and goes into parts of Wisconsin and Indiana.
Notice that I don’t look at the unemployment rate because that number is also impacted by estimates of how big the labor force is and how many people are actively looking for work, which excludes people who have given up. Besides, employment tells you how many people actually have paying jobs that enable them to pay a mortgage.
The graph below shows employment back to 1996 with a peak of 4.7 MM in July 2007 (a seasonal peak) followed by a loss of more than 450,000 jobs at the depths in January 2010 (a seasonal trough). Six years later the June numbers finally surpassed the previous peak by more than 37,000 jobs, which I believe is an all time high for the Chicago area.
However, there are naysayers out there who scoff at these numbers and claim that area job gains have been in primarily low wage positions. So I checked the data and that does not appear to be true. Look at the graph below, which also comes from the Bureau of Labor Statistics, and it shows average area wages actually rising during the recovery, which would not be true if the naysayers were correct.
This is all good news for the Chicago real estate market since it feeds demand. Maybe this explains how demand appears to be strong for higher end housing.
If you would like to keep your eye on these employment numbers I keep the graph updated on my Chicago Real Estate Market Trends, Data, Statistics page. It’s the 6th graph down the page.
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider’s view of the seamy underbelly of the real estate industry, or you just think he’s the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.